Here’s a question that often comes up during my financial literacy workshops and one I have had to deal with in my own personal and professional life: When it comes to houses and cars — is it better to lease or buy?

First full disclosure: I am not very good at taking care of things. If it cries, barks, meows or otherwise makes its needs be known to me, I will look after children and animals but plants, houses and cars take a backseat to other priorities in my life. That being said, there is a financial basis for making lease or buy decisions that preclude how much or how little one enjoys renovating a kitchen or bringing the car to the garage.

Let me explain. When considering the acquisition of a major asset such as a house or a car, you need to ask the following:

Will the current value appreciate or depreciate over time?

Will the asset serve to produce income?

Are there tax benefits that would affect the net asset value?

Are there usage considerations that would affect the asset value?

Take the case of buying a house. As a rule, real estate increases in value over time unless you buy a home that is not appealing to other buyers or some event takes place (i.e. economic recession) that results in the property devaluation. You can rent your house to produce income, but then there are tax consequences and you need to pay to live elsewhere. If this is your principal residence, you get to keep the full value of your capital gain tax-free if and when you sell. And if you are a homebody who responsibly maintains the property and invests in its upkeep, you are likely to be rewarded by an easily resalable property no matter what the market.

Unless you are skeptical of real estate values and/or are not in a position to make the necessary commitment in time and money, the financial benefits of buying a home make a very compelling case for making this major investment.

As for cars, this is a more divided case. We all know the value of a car dramatically depreciates the moment you drive it off the lot. But cars serve to produce income, whether directly for those in business or indirectly for those who need to drive to work. The tax deductions available when leasing a car for business use make leasing attractive in reducing operating costs with the added benefit of ongoing warranties and looking successful by driving the latest model. Some drive a car into the ground while others just want the security of having a dependable vehicle in the driveway ready to go when needed.

The rule of thumb for cars is to lease when you can deduct the payment as a business expense and to buy when the car is for personal use. The trick in getting the most value out of your rapidly depreciating automobile is to follow the manufacturers’ guidelines and do the preventative maintenance. Here in Canada that would include rustproofing and using the proper tires for the season. I’m not a big fan of the nanny state, but I do appreciate the fact that because Quebec law obliges us to change to winter tires by Dec. 15 and presumably take the tires off in the spring, I get my 7-year-old car to the garage regularly enough to do the full maintenance checks it requires.

Now if only the government would legislate the care of houseplants, my black thumb might turn green!